Reno entrepreneurs track biofuels proposal

CARSON CITY -- Alternative fuel entrepreneur Peter Gunnerman's clean burning, Nevada-made diesel product is the type of innovation lawmakers promoting job creation and alternative energy typically embrace.

Gunnerman and his father created GDiesel in a Reno garage and spent $25 million to build an emission-free refinery in Sparks and market the fuel to customers that include Clark County fleet operators.

"We've created jobs. We've created, potentially, an export technology,'' Gunnerman said. "We've never asked for a subsidy."

But lawmakers who should give his Advanced Refining Concepts a boost are instead working overtime on a bill that could squash it, Gunnerman said.

He's worried about Senate Bill 496, which mandates blending biofuels with diesel. He fears its passage would force diesel producers to use vegetable oil-type additives that aren't compatible with his production method.

The biofuel mandate was in a bill that died in the Senate Committee on Natural Resources, yet the idea lives on, a reminder that some ideas never really die in the Nevada Legislature. They continue like zombies in search of new places to live.

That means people, such as Gunnerman and others who need to track legislation that could affect their livelihood, can never really turn their back, even if a bill looks dead.

Backers of the bill, including lobbyist Josh Griffin, who represents Las Vegas Biofuels, will keep pushing buttons and pulling levers to keep a proposal alive. A biofuel mandate could help his client land big federal subsidies and create hundreds of jobs, so Griffin's task was to find a new avenue after the natural resources committee blocked the direct route.

"I'm kind of pleased it is getting some more chances," Griffin said.

The biofuel mandate, originally part of SB146, was folded into SB496 along with a solar energy incentive proposal that had failed to get attached to yet another energy bill, SB59, before the April 15 deadline for bills to clear committee.

SB496 was then routed around the natural resources committee, run by state Sen. Mark Manendo, D-Las Vegas, who opposed the mandate, to the Senate Committee on Commerce Labor and Energy, which is run by state Sen. Mike Schneider, D-Las Vegas, who likes both energy ideas.

"What a bizarre move. Both died and now are resurrected in an emergency bill," Manendo said. "They didn't even talk to me."

Schneider said the move makes sense.

"They didn't understand it and they didn't grasp it," Schneider said of the natural resources panel. "They are both energy bills so my committee will understand it better."

But just because the fuel mandate is skirting Manendo doesn't mean it has an open road to becoming law. Even if supporters take a circuitous route, opponents tend to follow with the same arguments used to block the direct path.

In this case, the opponents include Paul Enos, a lobbyist for the Nevada Motor Transport Association. Enos, whose group represents trucking firms, Gunner­man's concerns highlight the potential for unintended consequences when government changes fuel mandates.

The mandate could drive up the cost of truck fuel, Enos said. Biodiesel is already more expensive at the pump than petroleum-only formulations. And Enos says the cost could go up further if the federal government cancels controversial biofuel subsidies.

"If there is a government mandate for it you can jack the price up to whatever you want it to be, so this is just a way to go around the market," Enos said.

Opponents of the solar component of SB496 are also along for the ride.

Judy Stokey, a lobbyist for NVEnergy, said it would increase the company's cost of incentives for installing small scale, distributed solar power generators from about $255 million -- a level the company supports -- to more than $700 million over the next decade.

"It is very expensive and we just don't think this is the right time to do that to our customers," Stokey said.

Stokey said she's not surprised to be making the same arguments in the same legislative session about an issue that appeared, however briefly, to be dead.

"That is just all part of how they work it up here," she said of lawmakers and lobbyists determined to get an idea into law. "They always can find a place to put it."

Contact reporter Benjamin Spillman at
bspillman@reviewjournal.com or 702-477-3861.